Significant Industry Announcements, With Commentary

By Geoffrey James

IBM and Cisco announced plans to deliver speech-enabled self-service solutions for customer service contact centers. The solutions are intended to combine IBM’s integration and application infrastructure software and speech technology with Cisco’s Internet Protocol (IP) communications and focus on self-service speech applications.
Our take: Speech recognition is one of those technologies, such as the paperless office and the thin-client PC, that surface from time to time as if it was the wave of the future, but then quickly falters when it hits the hard ground of reality. While speech recognition systems generally can recognize yes, no, and Arabic numerals, anything beyond that is hit-or-miss at best. It’s doubtful that companies that attempt to use speech recognition technology in customer-facing applications will “enhance the customer experience,” to quote the IBM press release. It’s more likely they will annoy their customers to no end. Because of this we recommend software sales reps scrupulously avoid opportunities that attempt to push speech recognition beyond its natural limits as a technology.

Microsoft and SAP announced joint development of a new product, code-named Mendocino, that links SAP process functions directly to Microsoft Office applications. The intent is to offer users the familiarity of Microsoft Office as they access SAP’s business processes and information. The agreement gives Microsoft rights to sell SAP’s business process software and SAP the right to resell Microsoft’s Office software.
Our take: Microsoft sells its products primarily through retail stores, PC companies and online upgrades, none of which are appropriate for the sale of SAP software licenses. By contrast, SAP sells software through direct sales channels to enterprise customers. So the net effect of this agreement is to turn SAP’s direct sales force into a channel for Microsoft software. If you’re selling for SAP, we recommend you think twice before selling Microsoft to your accounts. Microsoft has a long history of bait-and-switch with partners who don’t fit into its long-range plans. If you sell for SAP’s competitors, raise questions about how this initiative squares with Microsoft’s own stated strategy to dominate the market for back-office software.

Oracle announced it will work with Intel on a framework to optimize Radio Frequency Identification (RFID) and sensor-based solutions. The companies will provide solutions to facilitate data management from the edge of the network into enterprise information systems, thereby allowing companies to better track inventory and customer and employee behavior.
Our take: The post 9/11 focus on security combined with a growing willingness within the general population to tolerate intrusive computer applications will make RFID a major source of software revenue over the next decade. One of the main challenges with these applications is using the data from the RFID tags to effectively track movement of products, customers and employees throughout a company’s facility. Software sales reps should learn about this technology and incorporate it into presentations about future offerings if appropriate.

SAP and IBM unveiled new features of IBM’s data product, DB2, which helps deployment and database maintenance for SAP customers. The two companies promised improved performance and advanced autonomic capabilities, such as a SAP tuner that autoconfigures DB2 in an SAP environment.
Our take: It’s interesting that this far more substantive announcement took place on the same day and at the same event where SAP announced it would become a channel for Microsoft software (see above). SAP and IBM are more natural partners than SAP and Microsoft, so we expect additional and deeper collaboration between the two firms. Sales reps for SAP’s competitors should emphasize their own links with IBM while sales reps selling or reselling SAP would do well to promote the IBM connection as an example of SAP’s long-term strategy.